Are San Diego foreclosures really declining or is it all more statistical tricks, in an attempt to make the market look healthy?
The latest round of figures from DataQuick and UT San Diego show a steep and steady decline in the local foreclosure rate. The figures show a 15% drop in notices of default being filed between October and November, to half of what we were seeing this time last year. This puts San Diego County at a measly 819 foreclosure notices last month, the lowest rate since August 2006.
This all sounds like incredibly positive news and in combination with rising home sales volume and home prices suggests we truly are in recovery mode if not entering a new boom era.
Still, San Diego real estate prices still have about a 30% climb to go before hitting their previous high, and before we can really call an officially and completely healed market.
However, are these statistics really painting a true picture of the market or are they being skewed by other factors?
Lower foreclosure figures could certainly be accounted for by at least two other factors. The first being the massive trend in short sales. 40,000 Californian homes have reportedly been sold as short sale since the mortgage settlement, but anyway you count them, it means they are being recycled.
The second could be mortgage lenders holding back on actually filing foreclosures. In fact it was just revealed that Bank of America alone has over $64 billion of 180 day or more delinquent home loans on the books which have not had foreclosure notices filed against them.
Fortunately, most real estate agents and investors are actually crying out for more distressed home inventory as we are now down to only about half of the available homes as 3 years ago. If this is accurate, the San Diego foreclosure crisis peaked in 2009.
This would indicate about another 3 years of foreclosures trailing off while San Diego builds on its reputation as one of the healthiest real estate markets in the country.
